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Direct Debits: What Are They And How To Set One Up

by Marsh Finance on Aug 12, 2024 11:31:17 AM

Key Summary

A direct debit is an automatic payment. This can be good for monthly bills such as utility, subscriptions, mortgages and car finance. Direct debits are convenient, save time, and offer you flexibility. If you want to set up a direct debit with Marsh Finance, just give us a call. We will talk through your options and provide a direct debit mandate. Once this has been processed, you're good to go. Managing direct debits is easy, just do this via online banking or in your bank branch. Setting up a direct debit can help you manage your finances, but you need to make sure you can afford payments before committing to anything.

An extreme close up of a blue debit card.

What Is A Direct Debit?

A direct debit happens automatically, without you having to do any work. Instead of reaching out to the billing company, you can give them permission to take the money themselves. This will happen on a certain date, so you can get ready in plenty of time. Direct debits are popular for the following payments:

  • Utility bills
  • Subscriptions
  • Mortgage
  • Car finance

Benefits Of Using Direct Debit

  1. Convenience: Once set up, payments are done for you. You can put your feet up knowing it's all sorted.
  2. Timesaving: No need to remember multiple payment deadlines or write checks.
  3. Flexibility: You can choose the payment date that suits you best.
 
Torn brown paper revealing the text 'How it works' underneath, symbolising explanation or insight into a process or concept.

How To Set Up A Direct Debit

At Marsh Finance, you will first need to give us a call, and we will talk about your options. Following this call, we will send you a Direct Debit Mandate: this asks for your bank account details and gives us the power to take payments out.

Once the mandate is processed, you’ll receive a confirmation from your bank. This will give you details of the payment schedule and the amount to be debited.

Managing Your Direct Debits

You can view and manage direct debits via online banking, or directly in your banks branch.

If you need to change payment dates, you will need to contact Marsh Finance to do so.

Setting up a direct debit can simplify your financial life, ensuring that your payments are made on time, every time. For more information or assistance in setting up a direct debit for your car finance payments, feel free to contact our team. We’re here to help!

FAQs

Is there a fee for setting up a direct debit?

No, setting up a direct debit is usually free.

Can I set up a direct debit for any type of payment?

Direct debits are commonly used for regular, recurring payments like bills and subscriptions.

What happens if there are insufficient funds in your account?

If you don't have enough money in your account, the payment could be rejected. If this happens, you might face fees from both your bank and the company. It’s important to make sure you always have enough funds to cover your direct debits.

How secure is direct debit?

Direct debit is a very secure payment method. You are protected by the Direct Debit Guarantee. This refunds any incorrect payments as soon as they happen.

What happens if my direct debit bounces?

Your bank will typically try to process the payment again. If it fails again, they may charge you a fee. Get in touch with the company you owe to, and try to sort out an alternative agreement.

Will the company try to take the payment again if my direct debit bounces?

Some banks will retry a bounced direct debit once or twice. It depends on the bank’s policy.

Can a bounced direct debit affect my credit score?

Multiple bounced direct debits could negatively impact your credit score.

How can I avoid bounced direct debits?

There are a few ways to avoid bounced direct debits:

  • Set up your direct debits a few days after you expect to be paid. This gives you a buffer period in case of delays.
  • Ask your bank about warning systems. These can notify you of low balances before a direct debit is due.
  • Keep a small amount of money in an easily accessible savings account. This can be used to cover shortages and help you make your payments.
My Marsh Finance direct debit bounced; what should I do?

If your Marsh Finance direct debit bounced, don’t panic! Here’s what you can do:

  1. Contact Marsh Finance Immediately: Let us know as soon as possible that your payment bounced. Explain the situation and be upfront about any difficulties you’re facing. We’re here to help!
  2. Move Money into Your Account: Try to transfer the necessary funds into your account to cover the missed payment.
  3. Discuss Payment Options: We offer support to customers facing financial difficulties. We may be able to offer flexible payment arrangements or solutions to help you get back on track.
  4. Avoid Further Issues: To prevent future bounced payments, set up a buffer in your account or talk to your bank about low balance alerts.

Here are some helpful resources:

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